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Tag: Italy

Another window on high-value philanthropy just opened in Italy thanks to UNHCR and Gruppo Kairos, a private banking and wealth management firm. In March, UNHCR published the results of a survey carried out with the finance firm. I am grateful to Giovanna Li Perni at UNHCR for a copy of the report, and for her presentation of the results at last week’s Festival del Fundraising.

During October-November 2015 Kairos asked its HNWI clients to complete a questionnaire; 91 of them, 44% women, 56% men, did so. This is not therefore a balanced representative sample of people of wealth in Italy (so we cannot safely extrapolate the results) but does give us at least some insight into how this group of people reacted. The group included a wide range of wealth levels from €1m to more than €30m, and a spread of age groups with, as you would expect, a bias toward middle age and older (85% were aged 46 or over). Almost all of the group were donors – 91% had made at least one donation to a social cause in the previous year (against 26% of the general population). The percentage who gave rose with increasing wealth, reaching 100% of people with wealth over €30m.

When asked about their largest gift during 2015 to any one organisation, most reported €5,000, with 73% of women giving at this level and 49% of men. Older people tended to give more, so 22% of the over-65s gave €25,000 and 11% gave €50,000. Of course these people were giving to a number of organisations, so 30% of this older group gave away a total of between €50,000-€100,000 in 2015.

Asked about the causes to which they made their largest gift in 2015, 21% chose scientific or medical research, 19% favoured children’s causes, and 16% poverty in Italy. Importantly for UNHCR, 10% chose help and protection for refugees as their top cause. 62% gave principally to causes in Italy.

Why did they give?

More than half (52%) said that their main reason for giving was because they felt privileged. 26% said it was giving made them feel useful. Interestingly just 4% of donors said that they gave because of their religious values, with 9% saying that they want to change things, to make a difference and the same percentage saying that they gave to continue a family tradition of philanthropy.

In choosing a non-profit, two major reasons stood out; the cause, and ‘transparency of the organisation and exhaustive documentation on results.’ This focus on transparency is interesting and is part of a trend we can see across Europe toward greater transparency in the non-profit sector. New laws (for example, in Holland) and new organisations (for example Fundación Lealtad in Spain) are encouraging this trend toward transparency.

Italians will tell you that business in the country is based on personal connections, and it seems that this might be true for philanthropy also. It is certainly the case for this group of philanthropists, who say that the most common channel for hearing about the organisations they support is via their personal network (28% of respondents, the largest single group), while 15% say that they chose the cause because they knew the leader of the organisation in person.

What does this tell us about strategy?

The information in this report is gathered from the clients of one bank, so we should be careful about extrapolating from it. But given that there is almost nothing else available on HNWI philanthropy in the Italian market, we might at least test some conclusions.

The research should help push up the pricing of ‘major donor’ programmes. Individuals responding to this survey have made gifts in excess of €100,000 to single organisations, and 20% of them have made gifts of €25,000 or more. We can even venture a Gift Capacity calculation for this group, defining ‘Gift Capacity’ as ‘The largest total gift that one person could give to any one cause, in ideal conditions, over five years’ (see my previous blog on this topic.) Five of the respondents with net worth of €5-€10m made gifts to single organisations of €100,000 or more, between 1% and 2% of their net worth.

The research makes the case for prospect research. It shows that personal networks are the means by which these HNWIs have been reached by their non-profit partners, and that these networks are their primary source of information. Prospect research has the tools to identify personal networks. Sadly, the number of prospect researchers in Italy is still in single figures.

This research was carried out in partnership with Gruppo Kairos, and we have here a strategic clue that a number of NGOs in Europe are starting to follow up. Private wealth managers and bankers are increasingly interested in philanthropy, and we would all do well to focus more attention on this key group of intermediaries.

This is the second year in which UNHCR and Kairos have carried out this study, and the plan is to continue the annual series; another opening window on the world of HNWI philanthropy in Europe.

This was like a Barcelona-Real Madrid match, with each team playing solo, two weeks apart. Two of the most significant stakeholder groups in the non-profit sector, the fundraisers and the philanthropists, each with their own view of how to change the world.

Amongst the differences there were common themes. Both sectors are growing. This year’s Festival del Fundraising was the largest ever, and the EFC Conference was a sell-out too. The rate of foundation growth is astonishing – two new German foundations are created each day, and we know from Factary’s New Trust Update that 214 new grant-makers were registered in 2014 in the UK. The same growth story emerged at EFC from all over Europe.

While both teams are training, there is a remarkable demographic similarity between them. Women lead both teams. The population at the Festival, and at EFC reflected this, whether we were talking about the all-women fundraising team at Save the Children in Rome or the Chair and key staff of Turkey’s Vehbi Koç Foundation. The future of our increasingly interconnected sector will be shaped by women.

Both conferences dealt with social change, in slightly different ways. At the Festival we heard about social change brought about by donations through non-profits. At the EFC we heard about social change through collaboration. Yes, collaboration. Not grant-making, or at least not centrally grant-making. An excellent workshop led by Nicky McIntyre of Mama Cash showed how Oak Foundation was focusing on changing the situation of women by collaborating with companies. Katharina Samara-Wickram from Oak Foundation described the organisation’s evolving Theory of Change. The foundation had initially focused all its women’s rights efforts on women’s rights organisations. But it had also commissioned research, from AWID amongst others, and had discovered that it might get more rights for its dollar (or Swiss Franc) if it instead worked on the millions of companies employing hundreds of millions of women around the globe. As a result Oak has developed an 8-point Business Case for women’s rights aimed at employers and using them as the vehicle for winning rights for women. This was one example amongst many of collaborations between foundations, NGOs and business to effect change in society.

I discussed this with a team from a leading UN organisation. The implications for fundraising are important, with the role of the fundraiser changing from being simply a grant-chaser to becoming the central relationship point for a complex web linking her own organisation with foundations, companies and other stakeholder groups.

The significant divergence between the two conferences came when we talked about investment. Fundraising team leaders in Italy complained about a lack of investment. Salaries in the sector are still modest and few organisations are willing to take the brave step of dramatically increasing investment in fundraising. By contrast the foundation sector spent a lot of time on investment, and appears to be ready to take on risk, so long as it has a social end. Thus the Italian majors, Fondazione Cariplo and Fondazione CRT both have programmes for investing their endowment in activities with a social as well as a financial purpose. There was some talk of divestment – with foundations encouraged to divest from the fossil fuel industry. But the bigger theme was Mission Related Investment. This was talked about across the EFC conference, with foundations making substantial investments in the social housing sector, and as venture philanthropy in social enterprises. Mission Related Investment opens up a substantial new line of funding for social purpose organisations – another challenge for traditional fundraising teams in Europe.

With only a little hindsight, both conferences felt like a revolution. Just ten years ago the Italian fundraising sector was tiny – a handful of visionaries in a few risk-ready organisations. At that time most European foundations were a closed shop – few published an annual report or had a website or could be induced to talk about their work. Their boards and management were older and dominated by men. Since then we have had a wave of transparency legislation running across Europe accompanied by a push for the same by the EFC itself – so now we can see what’s happening in foundations in Switzerland, the Netherlands and Spain (ironically, Italy remains somewhere behind the pack on transparency.) The feeling that a revolution is taking place in the sector ran through both conferences.